A look at key macro numbers ahead of Budget: GDP, fiscal deficit, inflation
GDP projected to grow at 7% this fiscal. Tax collections healthy in Q1. Fiscal deficit target set at 5.1% for FY25. Inflation on the rise.
Finance minister Nirmala Sitharaman is set to present the Union Budget 2024-25 on July 23 as experts widely expect that at least a few populist schemes will be announced which will help boost the rural economy and also create jobs. Here's a look at the macro numbers ahead of Budget 2024:
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GDP: Indian economy is likely to grow at 7% this fiscal while the Reserve Bank of India (RBI) projected GDP growth rate at 7.2% this fiscal. The International Monetary Fund (IMF) recently upped its India forecast to 7% this fiscal from its previous estimate of 6.8% and the Asian Development Bank in its latest update also maintained India’s GDP growth forecast at 7%.
Tax collections: Both direct and indirect tax collections have remained healthy in the first quarter of the current fiscal. Net direct tax collections grew by 19.54% this fiscal till July 11 to ₹5.74 lakh crore while gross collections grew by an even higher 23.24% to ₹6.45 lakh crore.
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Fiscal Deficit: The Centre has pegged its fiscal deficit at 5.1% for FY25 in the Interim Budget. Abhishek Gupta, founder and managing partner, Pierag Consulting LLP, said, “For 2023–24, the government's budget deficit was 5.63 percent of GDP. The government set the fiscal deficit target for 2024–25 at 5.1%, or ₹16.85 lakh crore of GDP. We expect that the government would reduce subsidies as a proportion of budgetary outlay to meet the fiscal deficit objective. However, lower subsidies may pressure rural demand due to obstacles like decreased agricultural output.”
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Inflation: Retail inflation surged to 5.1% in June this year with food inflation at 9.4% in the month. Wholesale price index based inflation rose to 3.4% in June, which was a 22-month high.
